In this podcast I am joined by AMI Managing Director Don Stern. We consider how defense counsel can work proactively with independent monitors to help clients who may have sustained an ethical or compliance violation or are under government scrutiny for allegations of illegal misconduct in a wide variety of industries, disciplines and corporate settings. In this episode, take a deep dive into the nuts and bolts of defense counsel working with a third-part independent monitor.
We began by exploring some basic questions around the attorney/client privilege, which belongs to the client and not the lawyer. Further, if a third-party independent monitor is retained by corporate legal to perform an assessment or review, it can be done under attorney/client privilege. It designed to give the company maximum information and flexibility to not have people being concerned about the information flow. It puts company’s in a position to make a decision on the possible self-disclosure. Not every issue needs to be self-reported nor does the government want to hear about every issue.
Stern emphasized that the privilege provides a company with the ability to self-disclose and, in some cases, to protect that information at least initially without worrying about being sued by private parties or class actions are securities cases. It allows an organization to “get an unvarnished view of the facts by an outsider or it goes to the lawyer who can assess it and discuss it with the client and then make a decision.” It allows you to explore such questions as: Do we need to report it? Should we report it? How should it be reported?” It can be a very powerful tool.
The bottom line is that companies cannot simply bring in a third-party independent, get a report or findings and then put their head in the sand. Stern believes being proactive means not simply bringing in an independent third-party but also using the information developed in a proactive manner. He said, “It is being aggressively proactive in fixing your problems. It is being as transparent as possible within that particular company’s environment. Identifying and fixing the problems, not only builds confidence internally within but provides assurance to the outside world; to shareholders, the media and government regulators that you are identifying your problems and fixing them yourself. This is the way to go.”